Dampskibsselskabet Norden Stock

Good morning, and welcome everyone to this webcast with the presentation of the Q2 2026 report from NORDEN that was published this morning. [Operator Instructions]

With that, I'll hand over to CEO, Jan Rindbo; and CFO, Martin Badsted from NORDEN. Please go ahead.

Thank you very much. And from my side also, welcome to our Q2 presentation. I think this quarter is probably one of the most sort of complicated in terms of operations, but it's also one of our better quarters in terms of the financial performance. So we'll dive obviously into that a little bit later.

I'd like to just start by setting the scene, just giving you a short introduction to NORDEN. As you know, our purpose is to enable smarter global trade. We transport all the essential raw materials that you use in energy, construction, manufacturing -- and manufacturing. And all these commodities underpin the modern living that we all know.

NORDEN is one of the world's largest carriers. We operate a fleet now just under actually 500 vessels, and we transport around 130 million tonnes of these essential raw materials on an annual basis. This scale gives us extensive market insight, gives us strong access to our customers, and it gives us the flexibility to optimize our fleet across all these various vessel segments that NORDEN are in and across all the regions that we operate in.

So our model combines, on one hand, customer solutions with very disciplined exposure management and flexible capital deployment. And that enables us to manage the shipping cycles, but also retaining strong cyclical upside. And when you look at that approach, that has generated, over the last 5 years, a return on invested capital of 25%, and that demonstrates our ability to create attractive returns through these changing markets.

So as we now move on with the slides, let me explain how this -- the business model behind our results, how that actually works. So NORDEN is more than just an owner of vessels. We combine 3 closely connected capabilities: commercial operations, exposure management and asset allocation. This commercial platform connects all the essential cargo that we carry with the right vessel capacity and enables us to optimize voyages, trading patterns and the fleet utilization. And we manage this exposure through a combination of owned, leased and short-term charter capacity. And it allows us to adjust our fleet to markets and also to customer requirements as they change.

So we allocate our capital across segments, vessels, owned, leased, short-term charters, purchase options in order to seek attractive risk-adjusted returns while we have the flexibility to recycle capital back into the business. And together, when you combine all this, these capabilities create an integrated and capital-efficient model that is built around the customer solutions that we deliver, the market insight that we have and then this disciplined execution. And this model becomes particularly valuable when trade flows are complex and customers place a premium on reliability. And that's the kind of market backdrop we are in today.

So I'd like just on this slide to just highlight the market fundamentals that we see increasingly favoring this NORDEN model. So the supply side outlook is positive. We are seeing that particularly in dry cargo, where we have an aging global fleet and where the order book actually still remains modest. And at the same time, we see the geopolitical disruptions and strained supply chains are making trade routes longer, less predictable and operations are becoming even more complex. And these conditions, they support vessel demand, but they also increase the importance of flexibility, scale and execution capabilities.

And here, we see that customers increasingly are preferring large, professional and reliable operators that can secure capacity and manage their complex logistics across multiple regions. And this is sort of where NORDEN stands out with our fleet of just under 500 vessels, global commercial network and this customer-centric approach that we have. And therefore, we are actually really well positioned to benefit from these structural trends, not just through our freight market exposure, but also by helping our customers managing these complex supply chains.

So with that introduction, I'd like to hand you over to Martin to sort of translate this into financial numbers here in the second quarter. So Martin?

Thank you very much. So NORDEN had a good quarter in Q2. As you can see from the graph on the left-hand side here, in the dark blue bar, we made a net profit of $101 million in the second quarter. That means that our return on invested capital grew to 11% when measured over a 12-month basis.

Asset values actually continued to increase, leaving our NAV at the end of the quarter at DKK 466 per share, which implies an increase of 23% since the beginning of the year. And finally, we continue to distribute cash to our shareholders, now distributing $34 million, in line with what we also did after Q1. And those $34 million is composed of a dividend of DKK 2 per share and a share buyback of $25 million.

Looking at the development in the 2 segments, there were improvements in both of them. As you see from the graph here, the tanker division made $81 million in the second quarter, which was up some $30 million compared to the year before. That was based on a very strong spot market driven, of course, by geopolitical disruptions and uncertainty and notably these good performance in the chartering teams.

Dry Cargo delivered an EBIT of $8 million, which, of course, is not enough, but it was a huge improvement over the minus $45 million delivered in Q1. As we discussed in Q1, we invested in fleet repositioning, i.e., moving vessels from the Pacific into the Atlantic despite incurring costs in that respect, but in anticipation of better rates in the Atlantic going forward. And that has panned out as expected and has resulted in benefits from the fleet position in Q2, which we expect to continue during the rest of the year.

Another important factor when interpreting these numbers is that within dry cargo, we had a number of ships getting stuck in the Persian Gulf. And that, in our estimation, added some $30 million of extra costs in the first half of the year. So of course, without these extraordinary costs, performance would have been even stronger.

We continue to proactively manage our core fleet. The asset management team has been super active in the first half of the year, doing 29 sale and purchase transactions. The overall intention with this is, of course, to take money off the table because the asset values are so high. But it is actually also a movement of the exposure within our portfolio away from the commoditized and large vessels such as Capesize and Panamax and MR and moving the capital into the smaller segments where specialized capabilities and customer relations are more important. So we are investing in Handysize and Multipurpose vessels.

And that actually means that even though we are taking sales gains off the table with our vessel sales, we are still investing in the fleet and maintaining a core fleet of around 80 units and maintaining a large amount of purchase options, providing good upside going forward.

And with the fleet changes and the improvements in asset values, we saw our net asset value, as I said, improved to DKK 466 per share compared to -- or an increase of 23% since the beginning of the year. As you can see in the pie chart, around 2/3 of the NAV is concentrated in dry cargo, 19% in tankers and the rest in other net assets with 14%, covering, of course, balance sheet debt, cash and other investments.

And on the right-hand side, we provide some sensitivity analysis indicating that if the asset values and forward rates increase, for instance, by -- or change by 20%, that will either, if it's a decline, lead to an NAV of DKK 333 per share or if it's an improvement to an NAV of DKK 625 per share.

Turning to the market developments. It was overall strong markets in both dry and tankers. You can see here from the 2 top graphs that spot rates increased in dry by some 70% year-on-year and in MR about 63% year-on-year. That improvement was, of course, also visible in asset values, which increased both by 27% to 28% across the different segments.

The Supramax or the dry cargo market strength was driven by an actually strong demand picture, especially in thermal coal, iron ore and minor bulks, whereas the bauxite imports were a little bit weak despite having been a growth driver in the most recent quarters.

The outlook for dry, in our view, is actually quite firm. We expect '27 that is probably similar, slightly lower than '26, which has been a good year so far, driven again by strong demand, but certainly also by a modest supply outlook.

The order book is increasing as people are chasing these returns in the market. But so far, we don't think it's alarming and there is still an aging of the fleet, which will provide decent scrapping potential to offset the higher fleet growth going forward.

On the tanker side, what is happening is, of course, disruptions in trade flows that are keeping spot rates high, even though fundamentals are looking weaker by the week here. So you have actually seen tonne-mile growth being quite negative, and you have seen order books growing quite a lot, especially in crude. And that, of course, starts to imply that maybe there are some more uncertainty on the level of tanker rates going forward. Also in tankers, we see a very strong order book development. And even though there is also aging of the fleet there, it seems like the order book acceleration is somewhat running ahead of that aging so that the scrapping potential is not enough perhaps to support the market fully.

That then means that if we look at our guidance, we actually increased our guidance back in the early parts of July based on a strong performance in Q2, and we issued there a guidance of $120 million to $190 million. And now after also a good performance over the summer, we have decided to increase the bottom to $140 million, narrowing the interval to $140 million to $190 million of net profits for the full year.

We are, in terms of open capacity, mainly exposed to dry cargo with some 4,500 open days and less in the tankers where we have around 1,200 open days. But overall, for the next coming years, we are fairly highly covered in both the large dry cargo vessel types and within MR with a cover of 80% over the coming couple of years.

And with that, I will hand you back to Jan, and final words.

Thank you very much. So in terms of the strategy, the -- our strategic direction is clear. We want to reduce the earnings volatility while maintaining the high returns that have characterized NORDEN. So firstly, we are deepening our customer relationships. We are building more recurring cargo flows that will support a broader and more predictable earnings base going forward.

And secondly, we are expanding into more specialized areas. This includes multipurpose vessels, project cargo, minor bulk and maritime logistics. This is where expertise and operational capabilities and that complexity that we are solving for our customers that creates a greater differentiation to what we can offer our customers compared to the rest of the industry.

And at the same time, we will preserve the agility that is fundamental to NORDEN. We will continue to capture attractive market opportunities, but it is within clear risk/reward guardrails. So the ambition here is not to remove cyclicality, but to combine a more resilient earnings base with disciplined exposure management to the cyclical upside that we see. And if you take that together, the strategy reinforces what we believe is a differentiated and actually attractive investment proposition.

So when you look at sort of the equity story for NORDEN, we are combining, on one hand, strong fundamentals where -- which NORDEN obviously offers exposure to. We have constrained vessel supply, increasing complex trade flows, and that favors large reliable operators such as NORDEN. And our flexible and capital-efficient model allows us to combine both short-term capacity, leased vessels, owned assets and all the embedded purchase options that we have and allows us to adjust to markets as they change.

And importantly, this model has actually delivered -- when you look at our average return on invested capital over the past 5 years, we have generated 25% annual average over that period. We also see significant underlying value. Martin highlighted our NAV at DKK 466 per share, and that is somewhat higher than the current share price we see for NORDEN. And when you look at the returns that we have given, we have a strong record of that. We've returned $1.2 billion to our shareholders over the last 5 years. So to summarize that, NORDEN represents a differentiated shipping investment. It's asset-light. It's commercially agile, and it's focusing on generating attractive returns through the cycle.

So with those words, that concludes the presentation, and we can now move to the Q&A session.

Thank you, Jan and Martin. And yes, we are now ready for the Q&A session. [Operator Instructions] And we will first have a question on your guidance here and the question goes here.

Is it to be on the safe side or somewhat conservative that you're only guiding for annual earnings of $140 million to $190 million when Q2 alone generated around $100 million. Could you elaborate a bit more on what is driving this and, in my view, relatively low guidance?

I can put a few words to that. I think, obviously, the Q2 seen in isolation was a very strong quarter. I think as usual, in shipping, you have to see our financial performance over several quarters. And here, if you combine Q1 and Q2, you obviously get a slightly different picture than just looking at the second quarter. I think what is important to understand in our numbers when you look at the first half figures is that we have already delivered $61 million of sales profits in the first half. And therefore, we are guiding towards $79 million for sales profit for the total year. And that means we have much less contribution from sales gains in the second half. So that is clearly one important driver.

I think the other one I would highlight is that the tanker market was exceptionally strong in the second quarter. And that was obviously driven by the panic in the market right after the Hormuz closed. And some of that panic has subsided, and that means also rates are, if not normalizing, they are still high, but they are not as high as we saw in the second quarter. So I think the tanker tailwind will be less pronounced in the second half. That is certainly embedded into our expectations.

Having said that, we do expect this -- the turnaround that we've seen in dry. We do expect that to continue into the coming quarters. We've had a very positive development in the dry cargo business here through the second quarter, where, as Martin highlighted, we are back in black, first of all, but it actually also includes some fairly significant one-off costs that has hit the dry cargo bottom line in the second quarter. So the underlying performance is actually even better than the numbers suggest. And we expect this continued momentum continuing into the second half of the year.

And then maybe just a final comment, we did lift our guidance back in July. We are now lifting the bottom end of the guidance again. So I think also the guidance here supports that positive development that we are seeing in the business.

And then another follow-up on this. Can you explain the graph under your guidance and it says 450 vessels, but don't NORDEN have notably less vessels?

No, I think actually that recently, we have seen tremendous growth in our activity levels, which actually means that we have employed around 470 vessels on average in the most recent quarter. So activity levels are quite high. But you can see here, of course, in terms of exposure, most of this is covered in Q3 also because we are sort of almost in the middle of Q3. But otherwise, it does indicate how much open capacity we have in the 2 segments, dry cargo and tankers, for both the remainder of the year and for the coming years.

And then there's a question related to sort of the low water situation in some of the rivers in Europe and the price increases on the Panama Canal. Can you -- and the price increase for using it be passed on to the customers 100%? Are you seeing like DSV and Maersk that it actually lifts your margins? And what about the rivers in Europe? Can you say a few words about the situation here?

Yes. I think -- I mean, it's all part of this El Nino effect that we do see impacting our business. And the Panama Canal, what we're seeing here is a reduced number of transits because of declining water levels, and we actually expect them to continue to decline in the coming months. We see more congestion on both sides of the canal, so more waiting time. All this builds into the fact that the world needs more ships to move the same volume of cargo because if you take one of our core trading routes, grains from the U.S. Gulf to Asia, typically, a lot of that traffic would go through the Panama Canal. There's one alternative that is to go through the Red Sea, that is not so popular now, and the Suez Canal. And that means, again, it's a good example of ships going on longer routes, carrying the same volume of cargo. So yes, we absolutely see this supportive of both NORDEN and our markets. And it's just one of the sort of bottlenecks that are growing in the supply chains that we are an important part of. So yes, it has an impact.

And then there's a question related to your net asset value slide to this -- go to this slide. So it says here, net asset value is DKK 466 per share, and you have been buying back at an average of DKK 313. Why is the new buyback only at $25 million if you believe the share trades well below value?

Yes, that's actually a good question. We firmly believe that it's a good idea to buy back shares with the current share price compared to the NAV. But we buy back our shares under something called Safe Harbor regulation to avoid conflicts in relation to inside information. And part of those regulation is that there are limits to how much you can actually buy back on any given day. And the $25 million is sort of the maximum amount that we can actually buy back over the course of the period here. So there's actually not so much more we can do on this front.

Maybe if I can just add one thing on the NAV. And I think what is interesting is that, actually, if we turn to this -- we had a slide with the pie chart here. I mean what is interesting here, I think, is that we have a significant part of our NAV that is cash, so therefore, not actually exposed or at risk in terms of the markets. We have 19% of our NAV here tied to tankers. But we have very large coverage of our tanker capacity for the next 3 years. So here, actually, we are well covered.

And then within the dry cargo NAV, as Martin mentioned earlier, we are taking cover, locking in profits on the more volatile elements of that on the larger vessels. And that means that increasingly, the NAV exposure is more towards the more specialized vessels, where actually we think that not -- it's not just a question of having market exposure. We like that. That's good. But it's also a question of having those capabilities. Those ships are typically servicing customers with more complex requirements, and that's typically where the ability to earn higher margins is also better than it is on the more larger commoditized parts of the shipping segments.

And then a question related to the Strait of Hormuz. I assume all D/S Norden's operated vessels are now out of the Strait of Hormuz and no longer stuck here. How will you handle voyages there going forward? Are you avoiding the Strait entirely? And what are the consequences of that?

Yes. So first of all, the 7 ships that we had in the Persian Gulf when the hostilities broke out are now out. So we managed to take advantage of one of the sort of relatively short peace periods there to get the ships out. So we no longer have any ships that are stuck in there. So that's obviously positive, and we're happy to get the ships out safely and the crew. We are not currently operating into the area for the same reason, safety, is not good enough for us to operate in the region. So we are awaiting what a peace deal could look like and then, obviously, waiting to see if it's sufficiently solid to regain confidence that it is safe to sail into the region.

So what -- so right now, we're not operating in the area, and that means that we are seeing an increased traffic into nearby countries. There is definitely more overland transportation. Again, it's a good example of these much more complex supply chain challenges that our customers are facing. And again, it typically leads to longer routes. I think on the tanker side, one thing to watch there, of course, is that the longer a lot of the world's oil production is basically shut in, then there is less oil in the market. There's also less oil to transport. So it is one of the sort of headwinds perhaps that could be seen in tankers here in the second half if these hostilities continue.

And a question related to this. You're also entering the second half with about 196 open tanker days and 223 open dry cargo days. How much of the guidance depends on the Strait of Hormuz staying open? And what happens to the range as it closes again?

That is a very, very difficult question to answer because what is open and what is closed. I think actually in dry cargo, we probably see that the Strait of Hormuz will not have a huge impact because there are both vessels getting trapped and cargoes not moving. So I don't think that will have a big impact. But on the tanker side, we have seen that this open up, closing, open and closing actually has a tendency to continue to create noise and disruption in trade flows. So that could have a positive effect on tanker forward rates or spot rates and, therefore, add some extra dollars to the earnings going forward, but it's incredibly hard to project.

And a question related to dry cargo. Is the continued improvement we began to see in the previous quarter still being confirmed? And can you generally put some words on your expectation and forecast for dry cargo over the coming years? Are we facing a really good period ahead as is being suggested in several places in the market and with other companies?

Yes. So if I can touch a little bit upon actually the market in dry cargo. We do actually think that the strong market to some extent will continue. So we expect rates similar to 2026, but maybe slightly lower. So demand actually continues to develop quite positively, and we see perhaps a little movement away from the big commodities like iron ore and bauxite over to the more minor bulks that will be good for the Handysize and Multipurpose vessels. So that continues to develop quite well. And then as I also mentioned during the update, the order book in dry is growing, but it's actually not accelerating to the extent that it's something to be super worried about. As I said, there is also a lot of old ships. And what typically happens is that when these newbuildings arrive in the market, depressing rates, people will scrap the old ships and then actually there's room for rates to improve again. So I think it's fair to say we have a constructive view on the future in dry cargo.

And based on this, we have also said in our commenting on the guidance that in dry, we do expect gradual improvement going forward. So one example is this vessel repositioning that we talked about where we moved vessels from the Pacific into the Atlantic in expectation of higher rates. And that has impacted positively in Q2, and we expect it to continue to impact positively for the rest of the year.

And then a question related to China. Can you give a specific update on how voyages and business related to China are developing? Is activity high, low, rising, falling? What do you expect from the market over the next year or so?

I can say a few words just on -- I mean, China, we continue to see relatively weak sort of inland or domestic demand in the Chinese economy. But nevertheless, China continues to import vast volumes of raw materials. And we see that coming out in terms of increased exports. I think steel production is a great example. We've seen a significant decline in property building, construction in China. And you would normally expect that would impact steel production very negatively. But actually steel production has been relatively resilient, but that is then backed by increased manufacturing and then, obviously, also steel exports, especially here in the second quarter, we've seen a significant increase again in Chinese steel exports, predominantly to the rest of Asia.

So iron ore is another example, obviously, commodity used for steel production. That -- despite that the steel production in China is pretty stable, not really growing, we have seen increased iron ore imports. We've also seen a little bit of inventory building both on iron ore and aluminum, which is related to bauxite imports that have also been very strong in China. China has actually not been importing that much coal. When coal prices move up, China tends to step out. And with the Hormuz hostilities, we've seen other Asian countries, Korea, Japan and Taiwan, as examples, stepping in and then buying coal.

But I would say that -- so it's a bit of a mixed picture on China. I think, overall, I think it's fair to say that with the weakness we've seen in the Chinese domestic economy now for some years, the weakness also in steel demand. I think most shipping analysts would have expected more headwinds on Chinese commodity imports, and that we have not seen that there is still strong imports and now actually importing a lot of soybeans also from both U.S. and South America. So China is still going despite the sort of relatively weakness we see in the economy there.

And a question on OpEx. How much OpEx rise are being experienced over the year, if any?

In terms of OpEx on owned vessels, I believe there is still some inflation, I would say, around 3% to 4%. So nothing out of the ordinary.

And then a question on your vessels, number of vessels. You have added 20 vessels to the core fleet this year while selling 9. This is a net expansion into a market where you also said values are at the top. Why is buying at this level consistent with a company that built its reputation on selling into strength?

Well, I think that is a good question. So we are clearly realizing a lot of profits on asset sales. This is both ships that we own and where we have purchase options that we can exercise and then sell the vessels. Where we are selling is more in these what we consider more commoditized and more closer to sort of peak cycle levels. So MR tankers is one example, Capesize ships could be another one. And this is sort of where we have been selling capacity. So that is more market-driven.

Fundamentally, we still actually believe in a good outlook for dry cargo, as we have explained. So it's not that we necessarily want to move out of that dry cargo exposure just yet, but we are moving it into the segments where we, in addition to the market exposure, also have what we call this base margin, the ability to generate additional margins on top of just the market development. And that typically is on the smaller vessels where we carry more complex cargoes. And that's why you're seeing this movement from the larger vessels and then into the smaller vessels. But we retain a lot of upside. We have still a lot of purchase options also still on Capesize and MR. So it should not be seen as a big move to move out of those segments in terms of the market exposure. But we think it's prudent to take profits along the way. We've seen strong increases just under 30% year-on-year asset price increases on Capesize and on MR tankers. And we like to pocket some of that.

And I think historically, when you look over the last 5 years, one of the reasons why we have this industry high return on invested capital is the fact that we are not just buy and holding tonnage. We are actively selling and taking these opportunities to capture the profits along the way. And that is what we are doing now on some of the MRs and Capesize ships. But we certainly don't think that the dry cargo market is entering into a weak period. But we are a little bit more concerned on Capesize, much higher order book relative to the smaller vessels. So we're just moving within the segment into ship types we believe have better upside from current levels.

And we'll just do a couple of last questions before we finalize. There's a question here on related to the cash flow. Net profit was around $101 million, but operating cash flow only $30.6 million with free cash flow being negative at $126.4 million. What exactly absorbed the $107.1 million in working capital? And when does it come back?

Yes. Very relevant question. So if you look into the cash flow statements, you will see cash from operations being around $30 million, as you say, for Q2. But actually, when you look at the full half year, cash from operations was actually over $100 million. So what happens is really timing differences between whether these cash flows are just in Q1 or in Q2 or where they specifically arrive. Then I would say there is some underlying tendency for higher working capital based on 2 factors. One is that we are growing our activity levels and the other is that oil prices are quite high. And that actually costs cash flow when you start up new vessels, you have to buy the bunkers on board, which then you can see that the inventory in the balance sheet is growing. These are oil inventories of both the ships, which are growing along with prices and activity levels. So that is the reason. And so cash flow will come back as soon as we sort of start operating in the ships or redelivering the ships when they are done with the charter period.

And then a question related to CapEx and payout policy. Capital expenditures of around $95 million is committed through 2028, while the payout policy stays at a minimum of half of profit. Which one gives way in a weak year?

We are committed to maintaining our dividend policy of minimum 50%. So it would have to be a very bad year before we sort of abandon that. So we stick to that.

And then a question on your fleet also. How much of your fleet is spot versus time charter? And what is your strategy going forward?

Yes. So on -- if we start on the tanker side, we actually do release as part of our sort of information pack for the quarterly results, we do release what we call our capacity cover table. And there, you will see that on the tanker side, we have a large cover. We have over the next 3 years, on average, over 80% covered already of that capacity. So here, clearly, our strategy is to lock in earnings, take advantage of the strong markets, get more visibility into a segment where market development is primarily driven by geopolitics right now. And of course, also not forgetting that the order book for tanker vessels is now for the total segment, including crude, is now at 25% of the current fleet. So that just gives us some downside protection on the tanker side.

On the dry cargo side, Martin mentioned earlier, strategy is to be relatively high covered on the larger vessels. Right now, there are opportunities to lock in good profits on that part of the fleet, but then stay relatively open on the smaller vessels, where, first of all, those larger vessels are more exposed towards China, typically carrying bauxite, iron ore, commodities that are mainly focused on China. Whereas the smaller vessels tend to be more broadly exposed to world GDP and, therefore, a little bit less risky perhaps, and obviously exposed to the cargo types that are more complex where we are not just relying on the market development. But also have this ability to add some operating margin that we call base margin on top of those market-driven rates. So that's the sort of overriding strategy.

Then, of course, we stay agile like in every quarter, if there are opportunities for us to -- we have also added a shorter-term MR tonnage when we see opportunities to do that. So that's what we look at in the operating units to add value along the way. But in the broad bigger picture, you should expect us to be derisking the more commoditized vessel types, the larger dry bulk and MR tankers and then building more exposure towards the vessel types that have this sort of base margin.

And here, just to add that, we are -- we have now built a fleet of 25 MPP newbuildings that will start to deliver at the end of this year and then through to 2029. And we're really looking forward to get these ships because they carry a lot of cargo types that are in high demand right now, windmill blades, batteries, but also construction for the oil industry. And here, again, the higher oil price is supporting maintenance and development in the oil and gas industry. So we have high expectations on that part of the fleet as that deliver.

And then one final question here looking a little bit into the future. What is the most important things you're focused on when you look ahead for D/S NORDEN's business over the next 6 to 12 months?

Yes, I can start and say that this turnaround in dry is important to us because this has been the part of our business where we have had a lot of volatility in our earnings. So actually, if you look at our earnings over the last 5 years in dry cargo, they have been fantastic. But we've had some extraordinary good years and then some pretty disappointing years in terms of also looking at our own performance. So we like the average, but we don't like the volatility. So a big part of our strategy is to focus on having more stable earnings while, of course, maintaining the same long-term high average on the invested capital that we have. So the dry cargo business has obviously a clear focus for us to ensure that the positive development that we have seen in the second quarter that that continues into the coming quarters. And here, we have good confidence that that will continue. So I think that is one big priority.

That was the last question for today. I'll leave the word to management for final remark.

Okay. Well, thank you very much. And first of all, thank you for all the great questions. I think we had -- we sort of got around the entire business and our segments and our markets and our business. So I appreciate the interest and the good questions. And we look forward to connecting again when we present the Q3 results later this year.

Thank you.

[Operator Instructions] With that, I'll hand it over to CEO, Jan Rindbo; and CFO, Martin Badsted. Mr. Jan, please go ahead.

Thank you very much, and hello to everyone. Thank you for joining. Let me start by just giving you just a brief introduction to NORDEN. We are a leading global operator transporting the essential commodities for industrial customers worldwide. We have a capital-efficient fleet strategy combining owned and chartered vessels, which enable us to navigate market cycles and deliver competitive returns. So today, we will take you through our performance and the strategic positioning of the company.

So let's dive straight into it, and let's do that with probably one of the most discussed topics at the moment, the conflict in the Middle East, which obviously are having big impact on both the markets and operations. So we see, obviously, on the tanker side, strong support on the tanker rate. We've seen surging spot rates where tankers are in high demand to help rebalancing oil markets in view of the lack of the oil supply that's coming out of the Middle East.

The dry cargo market reaction has been more muted. And here, it's probably more the additional operational impacts and costs that affect the business. We have seen, obviously, with higher oil prices, a significant increase in the bunker costs. So they're up roughly around 50% since the start of the conflict. That does not directly impact NORDEN because we hedge the directional risk of the oil price, but we are seeing physical delivery premiums have spiked that cannot be hedged.

NORDEN has, as you can see here on the map, we have 7 vessels inside -- trapped inside the Persian Gulf, 6 dry cargo vessels and 1 tanker. And we have obviously suspended all new business coming into the region. But we'll obviously touch much more on the situation in the Middle East later in the presentation. If we look at the highlights, the financial highlights of the quarter, we've made $11 million net profit in the quarter, which is giving us a return of just under 8% on the return on invested capital.

We have a very strong operational cash flow of $172 million in the quarter. And what is probably the most significant development overall in the quarter has been this increase in the net asset value of our business and our fleet of 11% since the end of the year. So in just 1 quarter, the net asset value of the company has actually gone up by 11% to now stand at DKK 422 per share. And we continue to return cash to investors. In this quarter, we are continuing with a quarterly dividend of DKK 2 per share.

And on top of that, we have a share buyback program of $25 million, and that brings the total payout to $35 million for this quarter. When we look at the group fleet overview, we continue to be very active in optimizing the fleet. We have, in this quarter, sold 7 vessels, 4 of those are from declared purchase options. We also continue to lock in longer-term earnings through time charter out. So we've done 8 long-term deals on time charter to secure forward earnings. We also continue to add ships.

So we have actually added more ships than we have sold. We've added 11 vessels in the quarter, 8 leases with purchase options, and then we have purchased 3 vessels. And we continue to sit on this big portfolio of purchase options. We have 91 in the portfolio, of which 33 can be declared over the next 2 years at prices that are currently 22% below current market prices.

And if we dive a little bit more into the fleet and look at the fleet composition, you will notice here that we are mainly on the ships that are exposed to what we call the positioning margin. So that's more the ships that are dependent on directional market calls. So typically, the larger dry bulk vessels, but also the MR ships. So here, we have specifically sold 1 Cape and chartered out 3. We've sold 2 Panamaxes. On MRs, we have sold 2 ships and time chartered out 5 ships.

So quite a lot of activity on these large and medium ships but predominantly reducing exposure in those segments. And then the ships that we are adding to the fleet have all been in what we call the smaller vessel sizes. They are more exposed to the base margin part of the business. This is the core operating margin that is not dependent on the market direction, but this is where a combination of cargoes, reducing ballast time, loading more niche type cargoes add additional margin.

And here, we have added 2 Handysize ships to the core fleet and then 9 Multipurpose ships. So we now have built a core fleet of Multipurpose ships of 22 vessels. And strategically, this is sort of one of the areas that we are focused on building. Most of these ships are newbuildings. The first one will deliver later this year, and then this fleet will deliver in the coming years.

One deal stands out in the quarter, and that is that we have signed a newbuilding contract for two ice-class multipurpose vessels. Those ships are ordered against a long-term contract that we have signed with a Swedish mining company, and the ships will be used partly to perform that contract when they deliver in 2028. With that, I will hand you over to Martin, who will talk a little bit more about our NAV.

Thank you very much. Yes, as Jan already alluded to at the highlights page, the NAV developed quite positively during the quarter, up 11% to DKK 422 per share. And it was actually a broad-based increase in the value of assets, both in dry and in tankers. You'll see from the table here that currently, actually, in terms of our own fleet, the majority of the value, $800 million lies within dry, whereas $200 million are in tankers.

But when you look at the value of the TC portfolio, including purchase options, it's actually a little bit overweight tankers with $263 million. On the right-hand side, you will see a sensitivity analysis of what happens to the DKK 422 per share if we change both the forward curve and the asset values by 10% or 20%. And you will see the outcome ranging from DKK 308 to DKK 559 per share, all actually either in line or above the current share price. Sorry for that. It's a little bit slow.

So looking at the market development in dry, it was actually a fairly strong quarter. When you look at the turquoise line in the middle of the graph, you will see that the spot rates for Supers, as an example, were far higher than 2025. Actually, they were up 41% over the quarter. And that was mainly driven by the standard commodities, iron ore, bauxite, grains, whereas coal was actually quite weak, although we are seeing that changing currently.

We do have a firm view on the long-term outlook for dry cargo, not least based on a favorable supply side, where you'll see on the right-hand side that the order book is actually matched more or less by the share of the fleet, which is over 20 years. So there's good reason to believe that you can actually still have favorable fundamentals in the dry cargo market going forward. Looking at our earnings in dry cargo, you will see that we made on an EBIT level, a loss of $45 million, which is, of course, unsatisfactory.

It was mainly driven by dry operator large and small, which both made a loss in the quarter. Of course, some of this was related to cost as a result of the Persian Gulf conflict, where we both have vessels stuck within the Persian Gulf, but certainly also the regional bunker premium that Jan talked about in the beginning, which are hedged to the extent possible, but there is still some non-hedgeable items of the bunker exposure we have that has costed us quite dearly during the quarter.

Of course, it's not all the Persian Gulf. It's also what we call regional positioning, which really means that we have decided to reposition some of our vessels from the Pacific into the Atlantic in expectations of higher Atlantic rates. The benefits from this have yet to materialize, but we still expect some of that to show up in Q2 earnings, and we do see gradual improvement in earnings in dry operators going forward. In tankers, it was a super strong spot market during the quarter, of course, driven by the dislocation of trade flows following the closure of the Strait of Hormuz.

You'll see the graph here actually coming up to close to $70,000 a day. That was actually an average of very large regional discrepancies where the U.S. Gulf ramped up exports quite aggressively and paying rates close to $100,000 a day, whereas it was a little bit more muted, but still good rates of, call it, $30,000 a day in the East. The development in rates has turned around in recent days.

And of course, the underlying problem here is that with the closure of the Strait of Hormuz, we are lagging 15% to 20% of volumes that will normally have occupied a lot of seaborne capacity. But also here, actually, fundamentally, we are not so worried about the supply side, as you will see on the right-hand side also here, the order book is matched more or less with the share of the fleet being more than 20 years old.

But we do think some of this order book is starting to accelerate deliveries during the second half that should put some pressure on rates going forward. In tankers, we made a total EBIT of $47 million, and it was actually mainly in the dry owner, which has some spot exposure through our NORDEN product pool. The tanker owner made $37 million and the tanker operator just over $10 million in the quarter.

And that brings me to the full year guidance, which, as you know, we upgraded end of April, and we raised it by $40 million to a new guidance of $70 million to $140 million and that includes a reservation of $30 million to cover possible costs for the 6 TC vessels that we have stocked within the Persian Gulf, which is really based on an assumption that those vessels may stay there actually until the end of the year before they can get out.

The earnings that we expect for 2026 are quite front-end loaded, meaning that much of it should come in Q2 and then taper off within the second half of the year. And in terms of risk exposure, we have about 2,300 open tanker days and close to 7,000 open dry cargo days, all being long against the market. That concludes my part of the slides, and I'll hand you back to Jan.

Thank you, Martin. So this is just a reminder of the key drivers in the business model and how we approach markets. So we have these 4 drivers: dry cargo and tankers are 2 and then asset heavy and asset light the operating business. So we have these four. Our exposure to the prevailing market conditions. And what we are seeing now is that in a very, very high tanker market, we have decided to reduce exposure there and move more of that exposure towards dry cargo.

And as we explained earlier on some of the previous slides, we have done a few deals to both sell tanker vessels but also take longer-term time charter contracts on tankers. And we now have, on average, around 80% cover for our tanker business until the end of 2028. So taking advantage of these high tanker rates and locking in long-term profits in that part of the business. That means that we have more exposure in the dry side.

And within the dry cargo business, as we explained on one of the previous slides, we are moving exposure more towards the smaller segments where we have more impact on the earnings than just being driven by the market. And we think this flexibility in the business model where we have several drivers, realizing that it's not always all 4 drivers that will go at the same time.

But over a rolling 5-year period, we can see that this generates higher returns than industry peers that are more specialized in just one segment. So this ability to switch between the segments actually has a lot of value for NORDEN in the long run. If we move to the next slide and then look a bit more at the direction we are taking towards 2030, we see an opportunity to go even deeper in our relationships with customers.

At a time where there is a lot of focus on supply chains and geopolitical uncertainty, NORDEN stands out as a reliable service provider in the freight industry, and that is something that we want to leverage and continue to build both more cargo networks with complementing contracts, but also have more efficiencies in the way that we operate the cargo book and the fleet.

The expansion towards the smaller vessel sizes within dry cargo is also with a view to focus more on what we call the base margin, the core operating margins in the business and thereby reduce the volatility in our earnings because in the smaller segments, project cargo, minor bulk commodities, but also the logistics part of our business, it is less exposed to market fluctuations and thereby giving more stable returns through the expertise that we can provide in those segments.

We will, however, continue to be focused on this adjusting our exposure and remaining what we call asset agile and continue to take the opportunities that we see in the market. So both buying and selling our vessels as an example, is largely driven by the opportunities that we come across in the market. And that sort of is an important part of providing strong upside in better markets. And that's exactly what we're seeing right now through the whole optionality portfolio where we have a lot of extension options and a lot of purchase options in our fleet.

And in rising markets, there's a lot of value there that we can realize. And that brings me just to the last slide and just a few points here on the investment story in NORDEN. When you zoom out and look at the industry, we think actually the macro view of the industry is fundamentally very positive because when you take a longer-term view towards 2030 and beyond, we see an aging global fleet, both in dry cargo and in tankers.

And we currently have a low order book, especially on the dry cargo side. So this replacement need of all these older vessels is not currently being met by the order book. And as we've also previously explained, all the geopolitical uncertainty and the dislocations are creating longer distances for transportation. And that means that we have a very healthy market balance as we see it.

And even if -- even at times of lower economic activity, the inherent risk of a prolonged oversupply situation is much, much smaller than what we have seen historically over the last couple of decades. Our business model, point #2 here that we can adjust to the different markets that we are in, gives us huge flexibility to manage the risk through the market cycle and deliver better returns compared to a pure-play company.

And then we have the strategic focus on expanding in areas where we believe we have even more impact ourselves in terms of our operating capabilities and really building this business that is more sophisticated, not least with the AI-driven opportunities that we also see in enhancing our decision-making and really bringing out the -- what we call the NORDEN platform, the value of being one of the largest operators in the industry and having a global network of offices close to our customers bring out all of that value as an important part of our strategic focus.

And then the last point we're making here is that we continue with a relatively asset-light approach in our business model, but with the upside from purchase options on the asset upside that enables us to return a lot of cash to shareholders and have this disciplined capital allocation that over time, at least historically have driven a ROIC outperformance compared to the industry. I think with those words, let's turn over to the Q&A session. And hopefully, there are questions where we can put a little bit more color to some of the points that we have made here today.

Thank you, Jan and Martin. And yes, we are now ready for the Q&A session. [Operator Instructions] But let's start off with a couple of the written questions here. They were originally in Danish, so this will be our translation. So the energy company, MASH Makes, which among other things, was supposed to produce biofuel for DS NORDEN's fleet, has gone bankrupt. It is reported that they were unable to raise capital for the next phase. You have been invested in the company since 2023. Can you tell us what loss you'll be taking in NORDEN's future financial reports in connection with this bankruptcy?

Yes, I can respond to that. So when you look at the future financials, this will have no impact because all of it has been provided for in the current accounts already. So of course, we have been very happy to work together with the team behind MASH Makes and I think they have a very interesting technology. But I think the phase that they are coming into now means that they will need new investors to take this forward.

And a follow-up question in connection with this. Can you tell us how this will affect your transition to biofuel? Are there new partners on the horizon or any concrete partnerships in the works?

Our efforts to work on decarbonization and offering that also as a product or service to some of our clients is unaltered. So we have a strong belief still that biofuel is part of the answer for the shipping industry, and we are working with several partners to help them actually realize zero emission transportation based on our products.

And the next question here is, as an investor, one has noticed that the bulk/dry cargo market for what is by now an almost excessively long period has not been optimal for NORDEN. The tanker market, on the other hand, is booming. Looking a bit into the future, where we also see risk of, for example, lower Chinese growth, wouldn't it make good sense for NORDEN to look more towards the tanker market over the coming 1, 2 years and prioritize this business leg more heavily? And do you agree with this analysis is also stated?

Yes. I think let me start by saying that going back to the business model that we have, both being in dry cargo and in tankers, there will be periods where one leg is more attractive than the other. And only a few years ago, it was the dry bulk business where we actually got the same question, why are we not just focusing on that? I think we've shown over time that the strength of having both activities, that's important.

If you talk about the risk reward from where we are today, yes, clearly, tanker earnings are very strong right now, and it's attractive to be in tankers. But to invest further in tankers right now is also very expensive and quite risky. So the risk reward, we think, is more skewed towards the dry cargo side. That's also why we're running with relatively high coverage on the tanker business. We have actually made money overall in dry cargo last year.

We are, of course, having a more difficult first quarter in dry bulk, which Martin also explained, there are some different drivers, some repositioning costs that will come back. So we do expect better dry cargo performance in the coming quarters. And of course, our focus is on obviously ensuring that we have the best possible performance. It also, a little bit, ties in with the strategic choice of going towards the smaller vessels where we have more impact on the results through our own operation and not just being driven by the market.

And then a question related to the current situation in the Middle East. It goes, how do you see the scenario for yourself when the Strait of Hormuz is reopened, and peace returns to the region there? One would imagine you'll be extremely busy for an extended period with simultaneously high freight rates primarily for tankers. Do you agree with that expectation? If yes, how long might one expect it to last? And would you also have a positive impact on the dry cargo from this?

Yes. So that's a very good question or a number of questions actually baked in there. But I think overall, our view is that the closure of the Hormuz Strait as we are seeing now is fundamentally negative for the tanker market. Yes, there have been some super short-term spot rate earnings in the last couple of months, but we think those are temporary.

And after that, if it continues for that long, there will be a lag of 15% to 20% of normal seaborne volumes, which we think if such a demand hits that the market will be under pressure. But of course, if the Strait of Hormuz were to open tomorrow, I think you're right that there could be an added employment for, again, a temporary period because countries and companies would need to restock, and there would be quite a lot to do in that case.

So it's very dependent on the time frame that we are discussing here. It's less of an issue on the dry side, where I think the impact on the market is more indirect through the impact on the macroeconomic environment. So if global economy suffers because the oil price goes to $150 a barrel, then that will also lead to pressure on demand within dry cargo. But overall, we think it's a fundamentally negative story with some very strong positive temporary effects that we have experienced in the last couple of months. I hope that answers your question.

And then a more specific question towards the Tanker segment. Rindbo mentioned earlier today in the radio show Millionaerklubben that NORDEN has already secured coverage of 80% of the tanker order book through the end of 2028. Is that understood correctly? And does that mean you're looking to bring more tanker vessels into the business going forward?

Yes. So that is correct that we have covered now around 80% of our tanker capacity until the end of 2028. And bringing more tankers into the book probably right now in terms of long-term deals, so time chartering in ships on long-term contracts and buying ships. Right now, we don't think that that's the right time to do that. Prices are very high; rates are very high. That's why we've done the opposite, selling ships and taking in cover by charting out ships.

Now, of course, how the market plays out in the coming quarters, if there's an opportunity, for example, in the scenario that Martin described that if there is a softening in tanker rates, then that could be an opportunity then to step in and take more capacity on again. So that is obviously part of the playbook in our business model that we can do that. But right now, we feel that the risk reward is not there to add tanker tonnage.

A question related to this, tanker outlook beyond Q2. You say the market eases or expect to be easing in second half of '26. How severe could this easing be if Hormuz reopens quickly versus stay closed?

Yes, that is a very difficult question. As I said before, if it opens immediately, there will be some short-term benefits from, I think, desired restocking. But if it lasts for a very long time, then we think, as we said, then the easing will come and being driven to a large extent by the lack of volumes, but also by newbuilding deliveries that will accelerate in the second half of the year.

And we will then look at the dry cargo segment. There are a few questions here related to this. There's one here. Entering Q1, you were short on the dry bulk market. How much of the dry cargo loss can be attributed to a wrong positioning?

Yes. So that is part of the explanation, but it's not actually the main driver of the results in the first quarter, and we now have a long position also in dry going forward. The main driver of the results in the first quarter is the additional costs that we've seen following the conflict in the Middle East and then this repositioning of ships on lower-paying backhaul routes from the Pacific into the Atlantic and the benefit of then positioning those ships back at fronthaul rates will only come in the coming quarters.

And another question related to dry cargo. Could you provide more detail on the bunker price impact in dry cargo during Q1, especially while the sharply higher regional bunker prices following the Persian Gulf conflict could only be partially hedged? And how much of this impact you expect to reverse or normalize over the coming quarters?

Yes. So that's actually a very interesting question. And I think there are multiple sorts of impacts on the oil market overall. What you normally see based on quotes in the media and so forth is typically the development in the standard barrel of oil, where you've seen rising prices may be from $70 before the crisis up closer to $120, $125 per barrel.

But on top of this, when you look at the diesel and gasoline and some of these refined products, then the price changes have been even more vehement and if you then look into the specific prices when you actually go into a bunker port in different regions, you've seen spikes that we probably have never seen before.

And this goes to explain why even though we have a hedge framework that actually hedges all our flat rate exposure, if you will, sort of the standard price of oil, then you can't hedge what happens in local bunker ports here and there because there are no price indices, there are no derivatives to do the hedging.

And that means that when you have to perform a cargo and you go into bunker, then suddenly you are met with very unpredictable and in this case, very high bunker prices that will then seriously affect the voyage results that you can incur.

And another question to the dry operator segment here, you're still loss-making at USD 9.2 million. When do the multipurpose Handysize additions start to show up positively in this segment?

So the core fleet that we are building, so the 22 ships that we referred to earlier, the majority of those ships are newbuildings that will deliver in the future. And the first newbuilding will deliver to our fleet during Q3. That is the latest estimate for that delivery. And then it will ramp up through '27 and '28. So it will come over the next sort of 2 to 3 years in terms of that core fleet. And that includes these 2-ice class newbuildings that will deliver in 2028.

And then a question related to the fleet and the options that you have here, let me just have a look. You sold 7 vessels year-to-date and then you have 33 purchase options in the money at strikes 22% below broker values. What's stopping you from declaring more of these now while asset values are at a multiyear high?

Well, one thing is that the underlying charter rate is very attractive compared to the current market rates, and then we have options to extend that as well. So in addition to the purchase optionality that we have, and there is also value in that. And when we look at the development on asset prices, we are quite optimistic that the prices are not going to decline substantially from the current levels because new yards are full with newbuildings.

The markets, especially on both dry and tankers, underbuilt the current asset values. So we would like to both get the value out of the extension options and then subsequently also get the value out of the purchase options. And then I think it's also important to highlight that we are also from time to time, declaring purchase options without necessarily also selling the vessels at the same time. So we could also -- and we are also looking at declaring some of these options and then actually keeping the vessels in our fleet as owned vessels.

And then a question related to your net asset value and capital allocation and what now seems to be the last question. Now it's up to DKK 422 per share, while the share price is around DKK 294, that's a 30% discount. You're distributing around USD 35 million for Q1. That's DKK 2 in dividend and a buyback of $25 million. With the share-trading well below now, would you not lean more aggressively into the buybacks rather than dividends?

Yes, that I think it is a good question and something that we, of course, also have discussed. There is one problem, which is really that there are some legal limitations as to how big a share buyback program you can undertake compared to the general liquidity in the share in the market. So we can't actually do much more on the share buyback side than what we are doing. So we actually agree in the argument that it's trading at a discount. So it's a good place to actually invest, but we have maxed out on that opportunity already.

Thank you. There seems to be no further questions. So I will leave the word to management for a final remark.

All right. Well, thank you for tuning in. Thank you for great questions related to the Q1 report. So thank you again for joining us here, and we look forward to seeing you again for the next quarterly presentation. Thank you.

Thank you.

Good morning, and welcome, everyone, to this webcast with a presentation of the Annual Report 2025 from Norden that was published this morning. [Operator Instructions] With that, I'll hand over to CEO, Jan Rindbo; and CFO, Martin Badsted from Norden. Please go ahead.

Thank you very much, and a warm welcome to this annual report presentation. And also welcome to the Center of Global Trade, where Norden plays a major role as one of the largest operators of dry bulk ships and product tankers, moving just under 130 million tonnes of essential raw materials across the globe.

But let's dive into the financial figures for 2025. And we delivered a full year profit of $120 million, which was right in the middle of our latest announced guidance for the year, but significantly better than our guidance at the beginning of 2025. We have delivered a return on invested capital of 8.9% and the underlying net asset values in the portfolio were as of the 31st of December, DKK 379 per share.

We are returning a significant part of the annual profit back to the shareholders through a combination of a dividend of DKK 2 per share and a share buyback program that will run until the end of April. This year was busy on the asset transaction front. We had 48 transactions for the full year. And an important part of our profit in 2025 was generated from vessel sales, where we sold 23 ships, of which 15 were from our purchase option portfolio, but we are not just selling vessels, we actually added even more ships. 25 came in through new leases and also the purchase of one vessel.

And when you look at the purchase option portfolio, we actually finished the year with 90 vessels in the portfolio, which was a growth of 14% in the number of purchase options that we control. And of the 90 purchase options, 40 of them are in the money that can be acquired in the next 2 years at values that are 18% below broker values. So still significant value in the portfolio despite the fact that we have realized some of that during the year.

With that, I'll hand over to you, Martin, to dive a little bit more into our NAV.

Thank you very much. As Jan said, our NAV at the end of the year was DKK 379 per share. That was actually a decline of about 11% since the beginning of the year, but all of that was driven by a weaker U.S. dollar. So if you actually adjust for the FX change and the fact that we paid out dividends and share buybacks, there's actually a positive underlying development in U.S. dollars per share.

The current NAV, as you will see from the table here, is about 2/3 exposed to dry cargo with $917 million of portfolio value and 1/3 is tankers, $428 million. And when you look at the numbers just below there, you will see that there's actually very little leverage on the balance sheet. So a very, very strong financial position is baked into these numbers.

On the right-hand side, we show you the sensitivity of the NAV compared to changes -- potential changes in the market. So for instance, if both the dry and tanker market change plus 10%, then the NAV increases about 16% to DKK 441 per share. So a good exposure against rising markets.

Now if you have had time to look into the recently published annual report, you will see that we have now decided to show some of our numbers a little bit differently. We have 6 segments in Norden: that is the Dry Owner, Tanker Owner; and then the Dry Operator, large and small tanker operator; and Logistics. And up until now, we have allocated or we have made subtotals for these segments into asset management and into FST.

That changes now. And instead, we will group these segments by Dry Cargo and Tankers, which we feel actually is probably more intuitive for most investors thinking about which exposure they are buying when they're buying a Norden share. So going forward, we will be reporting the Dry Cargo business unit and the Tanker business unit. But of course, nothing changes in the group figures and all the segment data will still be there.

Looking then into Dry Cargo in this case, let's start with the market development. It's clear from this graph where the dark line shows the spot rates for Supramax during 2025, but it was a year in 2 halves. So the first part of the year was actually fairly weak, whereas in the middle of the summer, the market suddenly actually took off and the second half was much stronger. That was to start with mainly a Capesize thing, but it actually impacted all the segments. I will say, though, that Norden had a fairly high coverage during the second half. So most of this has been impacting asset values and deferred periods.

Looking then into the numbers for Dry Cargo, you will see the 4 segments in the middle here. And it's clear that the Dry Owner part really delivers the bulk of earnings with $67.7 million for 2025. The other 3 combined, of course, produces a loss as is quite evident. And I think the important thing to notice here is that they are actually all improving quite a lot compared to 2024. So the trajectory is good, but the actual levels are, of course, not satisfactory.

You are seeing that trajectory on the graph on the right-hand side, where the red line indicates the total for 2024 and 2025 for the Dry Cargo business unit, which has then increased from minus $56 million to plus $29 million for the full year 2025. So of course, we hope to continue those improvements.

On the Tanker side, it was a little bit the same. The market in MR spot actually increased during the year and actually ended the second half of the year stronger than 2024, I think, against many people's expectations. That, of course, impacts our Tanker business unit because a lot of the exposure there is directly linked to the spot market.

And looking into the Tanker numbers, you will see that we made $116 million total between Tanker Owner and Tanker Operator. It is clearly Tanker Owner that delivers the bulk of these earnings. And the decline in Tanker Operator was very much expected because that is part of the business model. You can say that when the market is strong for a long period of time, the cost of tonnage goes up and it becomes harder and harder to make a good margin.

But I will actually emphasize that we have been able to grow the Pool part of our Tanker Operator business, delivering good management fees for a very low risk, which actually helps a lot in the measurement of return on invested capital.

So with that, I will hand you back to Jan for a look at our guidance.

Thank you, Martin. So looking ahead now to this year, 2026, we have an expected full year net profit for 2026 in the range of between $30 million to $100 million. And there are 3 key drivers in the guidance numbers. The first I'd like to highlight is the new activity that we bring in during the year. So there's, of course, some uncertainty both in the terms of the volume of the new activity, but also the margins that we can generate from this new activity.

Then the second point is that we have a significant open position of days that are not yet covered and exposed to the spot market. We have 5,700 open days in tankers and just over 7,000 days in dry cargo for the balance of 2026.

And then the third point is just a reminder that the guidance here only includes known vessel sales. So we have already concluded sales for -- with profits of $20 million, but it's only the known transactions that are included in our guidance for the year.

If we move on to the business model of Norden, we have 4 main engines in the business, so to say. We have both Dry Cargo and Tankers. And as Martin just showed, we have actually made a profit in both of these 2 segments. And then we have the asset-light, the operator part of the business and the asset heavy, which is the asset management part of the business. And here, clearly, the results in 2025 has been driven mostly by the asset management or the asset heavy, the ship-owning part of the business.

What we can see if we zoom out and look at this over a longer period of time is that having multiple legs to stand on having different types of activities actually helps generate superior returns over time because usually, if not all 4 engines are running, then at least some of them are. And in some years, it can be the dry cargo. Other years, it can be tankers or asset-light or asset-heavy. But over time, we have generated in the last 5 years, a return around 25% on the invested capital, which is significantly higher than our industry peers.

What we also see in this graph is where you have the absolute returns on the graph to the left. Then at the bottom, you see the volatility in the earnings. And here, you can also see that the earnings in Norden have been more volatile than our industry peers. And this is something that we are -- that we would like to address in our strategy. And this is clearly where the operating part of the business has had larger fluctuations.

But if we look towards the strategy and the direction for us towards 2030, then one objective for us is to reduce this earnings volatility, obviously, maintain the high returns. We like that, but we like to bring that with a higher degree of stability in the earnings so that we don't have such a large volatility in our earnings.

And the way we will do this is, first of all, we will look at the engine room of the operating business, become even more customer focused, really look at our cargo network, how we build a more efficient cargo network, reducing ballast time, capture more margins, optimize cargo flows, the voyage efficiencies that we see. We are also expanding into areas where -- that are less volatile. One of the significant points in 2025 has been our expansion into MPP and Project Cargo.

We have, in the last 3 years, made 3 M&A acquisitions all within this area. And we have now also built a core fleet of leased vessels, so in the typical Norden style with purchase options and extension options. And those ships are actually starting to deliver already this year in 2026. So Project Cargo, minor bulk, port logistics, are all areas where with our expertise, we can bring more stable returns as it's more capability-driven and less exposed just to market fluctuations.

But I think the third point in our strategy towards 2030 is that we are maintaining the core elements in our business model, the 4 main engines that I showed you because we think that really brings a lot of value as we have seen also in the past.

And that brings me to the last slide, where we're just looking at summarizing as an investor, what are the main drivers for Norden that you should have as part of your thinking when you look at Norden. And I think the first point to highlight is that we are actually in an industry with good fundamentals. We see an aging global fleet. Especially when we look longer term, so towards 2030 or even beyond 2030, there is a significant aging of the fleet, both in Dry Bulk and in Tankers. And we have a relatively low order book and especially in the smaller segments of dry, but actually a low order book compared to the fleet age profile.

And all these geopolitical tensions that we are seeing are creating dislocations that is also supporting tonne-mile demand. And that reduces the risk of prolonged periods of oversupply, which traditionally has hit the shipping industry in -- after periods of good markets.

The second point is this business model that I just highlighted. So I don't need to say too much more about that, but we think that's a very strong model to generate value from. And then the third element is that we are within that business model, really focusing now on more the -- what we call the capability-driven earnings that are less market exposed. So our operating capabilities and building these more sort of complex cargo flows, essentially building higher barriers to entry in what is traditionally very commoditized segments.

And then the last point is continuing this disciplined capital allocation, which has really driven our ROIC outperformance. So the benefit of running a large business with an asset-light platform is that we have the freedom, so to speak, to also buy and sell vessels. We are still servicing our customers because we are able to do that through the charter fleet that we do. And this sort of strict capital discipline allows us to return a lot of our profits to our shareholders.

Over the last 5 years, we have actually returned through dividend and share buybacks, $1.2 billion, which is about the same level as our market cap today. And that has also driven over time, a strong shareholder value creation. And then overall, our target for Norden remains to generate ROIC above 12%, so well above the capital cost, but also continuing to generate returns that are better than the peers that we compare ourselves with.

So with that, that concludes our presentation, and we're now ready to go to the Q&A part of the presentation.

Yes, we are now ready for the Q&A session. [Operator Instructions]. But let's go ahead with the first question here.

To what extent are the involving U.S. sanctions framework reshaping investment decision by shipowners and operators when it comes to ordering new tonnage, especially considering exposure to secondary sanctions, financing constraints and future trading flexibility?

Thank you. That's a great question because this was a big topic in 2025 with the USTR, the U.S. sanctions against Chinese shipbuilding and then the retaliation from China against the U.S. So there was a lot of noise in the markets, and I think everyone was scrambling to prepare for that.

I think it's fair to say that when we look at the investment part of this and what has happened since then is that there is no clear pattern showing that people or the industry is shying away from ordering in, for example, China. If you look at dry bulk and tankers, I think now close to 70% of new orders are coming to Chinese shipyards. So you can argue whether there is actually a choice that shipowners can make. Order books are also pretty full until at least 2029 now.

So I would say there's no clear pattern that the industry has shied away from investing in Chinese shipbuilding or in Chinese ships from Chinese yards. So I would say that it hasn't really changed the dynamics.

And according to the Q4 financial report, the company had around 70 leased vessels and 12 owned vessels. Furthermore, it appears that 24 new leasing agreements has been made in 2025. Can the company explain the interest rate risk associated with the leasing agreements?

Yes. Thank you for that question. So the structure really works in the way that instead of buying the ship, we take it on lease, which is typically a 5-year period with a firm lease payment during the period. And since that is a firm and constant lease payment during the period, that actually implies that we have sort of fixed the interest cost that is baked into that project. It's the same with the OpEx for running the ships that is all taken care of within that fixed time charter hire. So in essence, I would say the leases that we do have a fixed interest rate component, meaning that we have very low interest rate risk from that part at least.

And the next question goes, why do you expect a weaker second half for tankers?

Yes. So if I can answer that. So the current strength in the tanker market is, to a large extent, based on strong crude market where OPEC is pushing out a lot of products to the global markets. Of course, still the Russia sanctions and the Suez Canal issues, but also a low supply growth. But when we look into the second half of the year, we think actually that supply growth will accelerate a little bit. So that will keep or add more pressure to the market.

And it's probably also likely that OPEC at some point will need to adjust because the way that we view it at least is that there's simply too much oil coming to the market at the moment. And at some point, this will hit inventories and that will hit prices. So we think there's reason to believe that the second half of the year will be somewhat weaker than what we have seen recently.

Thank you. And the next question here. If dry bulk continues its positive momentum and tankers also does so partly in the first half, at least of 2026, I'm left with the impression that your guidance may be somewhat on the low side. Is your guidance set low and conservatively partly to be able to counteract geopolitical surprises?

So our guidance is based on the market expectations that we see now. Of course, if the market expectations or the markets continue to go up and improve, there is further value. We have the open days that we mentioned during the presentation, both actually in dry bulk and in tankers. And of course, if asset values also continue to go up, then that will support the NAV value of Norden.

So of course, there is uncertainties as we look into a year. Again, we are just at the beginning of the year. We also have a significant part of our business, which is the new activity that is coming in that will generate a margin. And here, there are some uncertainties around both how big that activity will be and what margins we can lock in there. So it is the reason or one of the reasons why we have a larger span in the full year guidance.

And again, just to repeat, the guidance only includes the asset sales that are already agreed. And therefore, if we choose to sell more ships during the year, and here, we are very optimistic looking at the opportunities in the market, looking at the market developments. But if there are further sales that we can do at profits, then that could add to the expectations during the year. And as I think we've shown you during the presentation, there's a lot of underlying value in Norden, both on the purchase options and on the owned vessels that we have in the fleet. But it will be opportunity driven as we go through the year.

And the next question here. What is Norden's strategy for MPP/Project segment for the next 5 years?

Thank you. That's a great question because it ties right into the heart of our strategy. So we have done 3 M&A transactions that are all supporting our development in this part of the business. A big change for us in 2025 was that the sort of natural evolution was to then start building a core fleet, and we have done 16 transactions on MPP vessels alone during the year. So building a core fleet of the most fuel-efficient vessels. So a great fleet that we have very high expectations for and already are seeing significant customer demand for.

So the strategy in the next 5 years towards 2030 is to keep growing this part of the business. It will help us to generate more stable earnings because this part of our asset portfolio is where we typically see the least volatility. And it's driven by capabilities from our teams across the world. And we, by the way, also see strong synergies between what we do in the MPP and Project Cargo space across our other vessel sizes. So we are now regularly carrying Project Cargo, not just on MPP vessels, but actually across our entire range of Dry Bulk vessels.

And the next question here. How do we plan to restore a stable and competitive earnings in Dry Operator, especially large vessels, which is once again delivering a large negative EBIT?

Yes. So again, it ties in with the strategy that we presented earlier. And what -- the component in our business that we are looking to grow here is what we call the Base Margin business. So all the margins that we generate, not from market fluctuations, but simply from having good cargo combinations, efficient voyage executions where we're able to match a vessel and a cargo in the market without taking much market risk. Pool Management, as Martin mentioned during the presentation, is also a great generator of these base margins. So that's where we have our strategic focus.

We still want to retain the ability to also position ourselves for the ups and downs in the market because that has done us very well over time. But building a more solid foundation of these base margin earnings is a key component in our strategy, and that will help us to both stabilize and hopefully also generate positive and better margins in the Dry Operator part of the business.

And a question here. Can you please explain the strategy behind the coverage in Dry Cargo for 2026?

Yes. So we have a high level of cover, which has taken -- which was taken during 2025. So we had a more cautious view of the market. That was one driver. But it is also part of our business model to actually have a relatively high level of cover so that we don't like to be totally exposed to the markets, which, of course, when markets go up, means that we're not getting the maximum out of the markets, but also during downturns, it means that we protect the downside.

And again, looking at this over a 5-year horizon, we have generated great returns by having that kind of approach to the markets. So we are more covered for 2026. But when you look at the numbers and our position, you will also see that we have a fairly large open position in dry bulk for 2027 onwards. We have over 30 newbuildings coming in. We have invested in Capesize, also new buildings that are coming in, where we have seen prices actually go up significantly from the time we made those investments.

But it was always with a view that 2027 would be the time where we would see those benefits. It has come -- it's fair to say that, that has come a little bit earlier than also what we had expected. But our portfolio as such is actually well positioned to capture those upsides. But as things stand right now, it's mainly from 2027 onwards.

And the next question here. You achieved a net profit of $120 million in 2025, but you're only guiding for $30 million to $100 million for 2026. What specific factors are causing earnings to expect it to fall so significantly? And what will it take for you to reach the upper end of guidance?

Maybe I can at least start with this. So as Jan said before, the guidance, $30 million to $100 million is only based on the known vessel sales that we have agreed to already, whereas the $120 million for '25, of course, includes all the vessel gains that were made during the year. And that was actually $17 million, leaving the $50 million residual as the operating earnings.

And that, of course, indicates that the new guidance is more on par with actually the operating earnings from 2025. And new gains if we make new agreements on profitable sales, will come on top of that. So that is a big part of it comparing sort of the vessel gains and the operating earnings in 2 different ways.

And the next question here. What are your expectations regarding the recent agreement between U.S. and India, where India has pledged to stop buying Russian oil? Could that have a positive spillover effect on your business? And how are you positioned in relation to India? Is this agreement factored into the guidance for 2026?

I would say, overall, it is factored in to the extent that we base our guidance also on forward rates that are prevailing in the market. So if the market sort of has priced this in, which typically happens very fast, then it's also baked into our guidance.

It's clear that if this were to have a very positive effect, that would be positive for our spot earnings during the year. And you can say, in principle, all the disruptions that we are seeing, including the fact that India now may not buy Russian oil is net positive typically. But we have also seen over the last couple of years with new sanctions and disruptions that the market is really fast in actually adapting to new situations and it often ends up not having a big impact because people will find ways around these disruptions.

So it's both yes and no, I would say. Some positive effect it's baked in, but it's not something that will, I think, change fundamentally the market outlook.

And then the last question here. How do you access the impact of a potential Hafnia acquisition of TORM on your competitive position and the markets?

That's a good question. Of course, there's no direct impact on Norden, but I think consolidation in the industry is a good thing. So we, in a way, welcome that, but it's not something that really concerns us that much. We are focusing on our own business, servicing our own customers, running an efficient Pool Management business towards the third-party owners that are part of our pool, I think that is what is top of our mind.

Thank you. There seems to be no further questions, and I'll leave the word to management for a final remark.

All right. Well, first of all, just the usual caution about forward-looking statements. But having said that, thank you very much for tuning in to this annual report presentation. Thank you very much for the many great questions. I think that gives us an opportunity to put a little bit more color to some of the highlights that we've shared with you in the presentation. So thank you very much for that. Thank you for engaging. And we look forward to seeing you again next time when we report on the Q1 results later this year.

Good morning, and welcome, everyone, to this webcast for the presentation of the Q3 2025 report from NORDEN that was published this morning. [Operator Instructions].

With that, I'll hand over to CEO, Jan Rindbo; and CFO, Martin Badsted, from Norden. Please go ahead.

Thank you very much, and also a warm welcome from my side to this Q3 presentation of our results. Let's dive into the numbers. And in the third quarter, we delivered a net profit of $26 million. This was driven by asset management and vessel sales as we continue to realize values from our fleet portfolio. And what is also evident here is that with a rising market and rising asset values, we've seen our NAV increase by 7% in the quarter.

With better-than-expected performance and also this rising market, we have raised our full year guidance on the 28th of October to a range now of between $100 million to $140 million. We have also had a busy year so far with 45 asset transactions. So this is one of the hallmarks of NORDEN, where we are actively using the asset markets to optimize our fleet portfolio.

With that, I will hand you over to Martin Badsted to take a closer look at some of our numbers.

Thank you very much, Jan. So looking first into the NAV, where, as Jan said, the NAV increased 7% since the end of June to now DKK 362 per share. You will see that from the table, 2/3 of our NAV or the fleet value at least is in dry cargo, whereas the last part is in tankers and, of course, also supported by a fairly strong balance sheet with a net financial position of $375 million.

We have added some sensitivity analysis here shown on the right-hand side, where we show what happens to the NAV if you change the underlying asset values or forward rates by 10% or 20%. And you will see in the upside bars here in the graph that a 10% change will actually give you an 18% upside and a 20% change will give you 37% upside in the NAV figures.

Turning to the business units, starting first with Freight Services & Trading. We made a loss of $14 million in the quarter, mainly driven by poor performance, especially in Capesize in our Dry operator large vessel segment. Importantly, the Dry operator small vessels actually did quite well and generated a profit of $9.1 million. And when you combine the 2 segments, we are seeing improved performance towards the end of Q3 and into Q4.

Tanker operator made a profit of $2.4 million based actually on very good TCE earnings in our tanker pool. And actually, that led to a margin per day -- per vessel day of $1,700, which is a very strong number, although a little bit down on the numbers from last year, which were exceptionally strong. Logistics have actually improved its operating performance and have now delivered $1 million of positive EBITDA during the quarter.

In asset management, we continue to do quite well in both of our segments. So we made a profit of -- EBITDA profit of $62 million in the quarter. $27 million were from sales gains, still leaving $35 million in the quarter in operational performance. In dry, we benefited from high coverage taken on at times when the TC rates were stronger than now. And in the tanker owner, we benefit from the spot position that we have in a market that has been tightening during Q3.

And as Jan said, we have been super active in managing our portfolio with 22 sales and 22 new additions to the fleet and actually also buying 1 vessel into our own fleet. And that means that even though we are selling quite a few vessels and realizing those values, we actually still have a strong portfolio of 83 options that provide good upside in potential tightening markets.

Turning to the market development. You will see here from the graph that it was a fairly soft first half. And then in the beginning of Q3, the Supramax rates spiked, as did Capesize and other rates in the market, mainly on the back of strong coal volumes. This has actually continued so far during Q4, still on strong coal volumes, but actually also on a rebound in bauxite transportation. We actually think that the fundamentals are pretty strong in the market at the moment and not least supported by all the uncertainty of geopolitical uncertainty and sanctions being in place that generally is supportive of rates in this environment.

In the tanker space, we also saw improvements in Q3. You see here the dark line actually coming up above the line showing the rates from last year. So here also, we are talking about geopolitical uncertainties, sanctions, trade skirmishes and so forth, which actually tend to lead to longer distances and therefore, require much more tonnage to transport the same amount of volumes. After the end of Q3, we have also seen a very strong development in crude tanker rates based on OPEC deciding to add more barrels to the market, thus leading to more transportation. And even though we haven't seen so much trickle down into the product tanker rates so far, we actually believe that, that will happen for the rest of the year and into 2026, leading to a strong market development also for our MR tankers. That does last, we think, into the first half of 2026, after which there will be some pressure from newbuildings coming into the market towards the end of next year.

And with that, I will hand you back over to Jan.

Thank you, Martin. So in markets that are driven by geopolitics and that are quite volatile, it's good to have a dynamic and flexible model to adjust to that kind of environment. So in NORDEN, we have 4 drivers in our business model. We have dry cargo and tankers, and we have also owner and operator activities. And actually, within the dry cargo segment, we are in multiple vessel classes, and we also have our logistics business. So it means that we have a broad spectrum of activities where we can adjust our investments and exposure between.

And what that gives us is, over time, it delivers better returns than more simple businesses. And we can see here on the right-hand side that NORDEN have been able over a rolling 5-year period to generate superior returns on our invested capital. We have also seen, though, that we have a higher volatility in our earnings and specifically in our freight services and trading business. And here, we do have a focus on generating a higher level of stability in those earnings, while, of course, at the same time, maintaining all the upside that we like from the optionality and therefore, move us to more to the left side in the graph that you're seeing on the right-hand side in terms of volatility.

If we turn to the next page and look at the full year guidance. So as mentioned, we raised our guidance on October 28 to a new range of between $100 million to $140 million. And if you look at our position below, where we have the open days, you can see that we have a long position across the business, both in dry cargo and in tankers, which means that we are currently benefiting from the sort of momentum that we see both in the dry cargo and in the tanker markets. So we continue to see good earnings in the asset management part of the business. And we are actually seeing an improvement in the operating earnings in Freight Services & Trading, where we are moving closer to breakeven levels here towards the end of the year.

With that, we turn to the last page before we go to Q&A. And just summarizing that we've had a good first 9 months of the year with a total profit of $111 million and a return on invested capital of 10%. We have raised our guidance, as I just mentioned, on better-than-expected operational performance and also rising markets, which also partly has led to the increase in our net asset values that now stand at DKK 362 per share.

We've been extremely active in the asset markets, where we've had a total of 45 transactions. And I think what is notable here is that we have also built a core fleet now of multipurpose vessels. Most of them will deliver in the future, but it is sort of positioning NORDEN in that segment where we see great upside, both from demand and a low order book. And then we have a range of actions to ensure that this improvement we are now seeing in FST will continue and push into 2026 onwards.

With that, let's turn to the Q&A session.

Thank you. We are now ready for the Q&A session. [Operator Instructions] And we have a first written question here that is, how is the market you operate in affected by the U.S. tariffs?

Yes. Good question. And especially right now, of course, where there are -- where we just had this meeting in Korea between President Xi and Donald Trump. So obviously, if we start sort of in the helicopter, tariffs is not good for trade. It creates barriers for trade. But having said that, what we see in shipping is that trade flows tend to shift with the barriers. So for example, using the soybean trade as an example right now, where China, instead of buying in the U.S., they have been buying a lot of soybeans in South America. And at least in our business, we can quite easily adapt to that and simply load the cargoes, move the ships to South America instead of the U.S. So I think that's the benefit of, again, having a flexible business model.

Now I think with the tariffs, that has created a lot of noise in the world. But when you look at world GDP growth, and you actually look at underlying sort of economic developments, we have not seen a huge impact. The world carries on. So at least so far, you can say, the consequences of higher tariffs have not really been felt in the global economy.

Thank you. And then we have another question here is, how is the balance between owners' market and charterer's market developing?

This is actually still something that we are struggling a little bit with. We call it also a challenging operating environment. So for instance, if you take some of the dry cargo vessels that we are operating, we are seeing that asset prices are very firm. Period rates are actually also quite firm. And it's still quite hard for an operator to take in ships on period and put them into the spot market and actually make a positive margin on that. It has probably improved a little bit during the quarter with the tightness of the market where spot has also come up. But it is still a general challenge that we see basically across the segments, but probably mainly in the bigger segments.

Thank you. And another question here. How are you balancing market exposure long, short into 2026?

Yes. So I think we showed on one of the previous slides, we showed the position where we are long across the group. I guess I can show the slide here, where you see at the bottom that we have a long position across both dry cargo and tankers and especially actually into 2027, because this is also the time where we will take delivery of some of the owned newbuildings that we have ordered on Capesize in Japan and also a number of the leased vessels are coming into the portfolio at that time.

Of course, if markets continue to go up and asset prices rise, we also have the choice that we can declare purchase options and keep the vessels and further build this position out in time. And we can, of course, also go out and do additional deals. The challenge, I think, at the moment is that asset prices are high, newbuilding costs are high. So to order a new vessel comes also with a pretty hefty price tag. So it's not a sort of a slam dunk decision. Even though you have a positive view on the markets to go out and order vessels, they are at a historically high cost.

Thank you. And another question here. When do you expect to see positive margins across the segments in the Freight Services & Trading division? And how do you see the margins developing into '26, '27?

So I probably cannot comment directly on exactly what we see there. But what we have said in the report and in the presentation here is that based on the good trend that we are seeing in recent months, we are actually expecting that the FST margins will move towards breakeven levels for the remainder of the year. And also that the initiatives that we have put in place to improve performance will take effect and work as we expect during 2026. So we are seeing we are on a good trend, but I cannot be more specific than that at the moment.

I think I can add just one thing, and that is that what we did see in the third quarter was that 3 out of the 4 segments were actually positive. So the challenge, as Martin also said earlier, is mainly on the larger vessels. And that is, of course, where our focus is to turn that around.

[Operator Instructions] And another question goes here. What market effect have you seen so far from sanctions towards Lukoil and Rosneft?

I think it's a little bit early to actually expect a meaningful impact of this. There is also the element that when you sanction parts of the market, then flows and activity tends to move to other parts of the market. So I think it's still early days, but our view is probably that we won't -- we shouldn't expect a big impact of that particular sanction package.

Thank you. There seems to be no further questions. So I'll leave the word to management for final remarks.

All right. Well, thank you very much for good questions. Thank you very much for your interest. And we look forward to see you again at the next presentation.

Thank you.